Carmike Cinemas’ First Quarter Revenue Rises 22.9% to $158.9 Million

  Carmike Cinemas’ First Quarter Revenue Rises 22.9% to $158.9 Million         Box Office Admissions Increase 20.4% and Attendance Rises 16.9%   Concession and Other Per Patron Spending Rises for 17th Consecutive Quarter               Definitive Merger for Sale of Screenvision Announced  Business Wire  COLUMBUS, Ga. -- May 5, 2014  Carmike Cinemas, Inc. (NASDAQ: CKEC):                 Webcast/Conference Call TODAY, Monday, May 5 at 5:00 p.m. ET                  WEBCAST LINK:   www.carmikeinvestors.com  (archived for 30 days)                  CALL DIAL-IN:   800/920-2977 or 212/231-2920 (international callers)                  CALL REPLAY:    800/633-8284 or 402/977-9140, passcode: 21714378 (through May                 12)                   Carmike Cinemas, Inc. (NASDAQ: CKEC), a leading entertainment, digital cinema and 3-D motion picture exhibitor, today reported results for the three-month period ended March 31, 2014, as summarized below.                                     SUMMARY FINANCIAL DATA  (unaudited)                                                                                    Three Months Ended                                          March 31 (in millions)                            2014            2013 Total operating revenues                 $   158.9       $   129.3 Operating income                             8.1               3.4 Interest expense                             13.1              12.3 Theatre level cash flow ^(1)                 27.5              22.7 Net loss                                     (3.2   )          (5.8   ) Adjusted net loss ^(1)                       (2.6   )          (3.6   ) Adjusted EBITDA ^(1)                         20.7              17.2                                                             (in millions)                            Mar. 31, 2014     Dec. 31, 2013 Total debt^(1)                           $   453.7         $   455.3 Net debt^(1)                             $   319.8         $   311.4        Theatre level cash flow, adjusted net loss, adjusted EBITDA, total debt       and net debt are supplemental non-GAAP financial measures.       Reconciliations of theatre level cash flow and adjusted EBITDA to net (1)  income and adjusted net income to net income for the three months ended       March 31, 2014 and 2013, as well as a schedule of total debt and net       debt as of March 31, 2014 and December 31, 2013, are included in the       supplementary tables accompanying this news announcement.         “Carmike’s theatre circuit outperformed box office and attendance gains in Q1, as well as our 17th straight quarter of higher year-over-year concessions and other per patron spending,” stated David Passman, Carmike Cinemas’ President and Chief Executive Officer. “The Company’s per screen admissions revenue and attendance grew approximately 12% and 9%, respectively, versus the prior-year period. This compares to reported domestic industry box office revenue and attendance growth of approximately 6% and 5%, respectively, during the quarter.  “A more compelling, diverse and well-spaced film slate, versus the comparable period, positive contributions from the first full quarter of operating results from the nine theatres and 147 screens we acquired from Muvico in late 2013, as well as several recently opened Carmike locations, drove strong top line financial performance in Q1.  “Innovative concessions and promotional strategies combined with Carmike’s customer-centric focus on providing guests with an exceptional experience on every visit, continue to be key elements of our operating success. Concessions and other sales per patron increased over 8% to a Company record $4.52 in Q1 2014, further underscoring our achievements.  “During the quarter, we announced plans to open three state-of-the-art theatres in Fayetteville, NC, Spring Hill, TN and Traverse City, MI. We have a total of six announced locations under construction. Subsequent to quarter-end, we also completed a remodel of our Mount Lebanon, PA theatre in the Pittsburgh suburbs and opened the Tiger 13 in Opelika, AL, not far from the Auburn University campus. There are a number of other new-builds in the planning or advanced negotiations stages. We continue to actively search for acquisitive and organic growth opportunities that will help us achieve our circuit expansion target.  “Today’s announcement by National CineMedia to acquire Screenvision, of which Carmike owns approximately 19%, represents the successful culmination of nearly three years of incredibly hard work by Screenvision’s management team, associates, partners and owners. We are pleased to be joining the NCM network in the near term, and look forward to working with Kurt Hall and the other members of the merged organization’s management team.  “We believe that Carmike is well positioned to capitalize on future opportunities for circuit growth. Our balance sheet continues to strengthen and we have ample cash balances on hand with a very manageable debt level. In addition, our operating results continue to improve as evidenced by our significant year over year Q1 growth in operating income and bottom line results. We consider the recent ratings upgrade of our senior secured notes further recognition of the continued improvement in our financial position as we continue to identify and act on growth opportunities in 2014,” concluded Mr. Passman.                                                 THEATRE PERFORMANCE STATISTICS (unaudited)                                                                                                        Three Months Ended March 31                                                    2014            2013 Average theatres                                      252              246 Average screens                                       2,660            2,480 Average attendance per screen^(1)                     5,104            4,687 Average admissions per patron^(1)                  $  7.19           $ 7.02 Average concessions/other sales per                $  4.52           $ 4.18 patron^(1) Total attendance (in thousands)^(1)                   13,578           11,620 Total operating revenues (in thousands)            $  158,924        $ 129,283  (1)  Includes activity from theatres designated as discontinued operations       and reported as such in the consolidated statements of operations.         Carmike Cinemas’ Chief Financial Officer Richard B. Hare stated, “Carmike generated another quarter of solid results, including increases in box office receipts of 20.4%, concessions and other revenue of 27.2% and total operating revenues of 22.9%. Average Q1 admissions per patron increased 2.4% to $7.19, while average concessions and other revenue per patron rose 8.1% to an all-time quarterly record of $4.52. In aggregate, during the 2014 first quarter Carmike guests spent $11.71 per visit to our entertainment complexes, also a record level.  “Carmike’s Q1 2014 film exhibition costs as a percentage of admissions revenues was 54.2%, compared to 53.1% in Q1 2013. The increase was largely due to higher film rent associated with top tier films compared to the year-ago period. Concession costs as a percentage of concessions and other revenue decreased from 12.3% in the first quarter of 2013 to 11.6% due primarily to a decrease in discount and other promotional activities.  “In an effort to enhance visibility into our theatre operating costs, we are now reporting separate line items for salaries and benefits, theatre occupancy costs and other operating costs on our consolidated statement of operations. These were previously included in other theatre operating costs. Salaries and benefits rose $3.2 million to $21.5 million and theatre occupancy costs rose $5.1 million to $20.4 million in Q1 2014 due primarily to recent acquisitions and new-builds. Other theatre operating costs were $29.4 million, compared to $23.8 million in the 2013 period, due primarily to incremental operating expenses resulting from our expanded circuit.  “General and administrative expenses were $7.5 million, versus $6.0 million in the 2013 period, partially due to outside professional fees. As expected, quarterly interest expense rose to $13.1 million, due principally to the assumption of long-term lease obligations associated with the acquired Muvico screens.  “Carmike’s Adjusted EBITDA rose 20.0% to $20.7 million and theatre level cash flow increased 21.3% to $27.5 million. At quarter-end we had $319.8 million of net debt, versus $311.4 million at December 31, 2013, reflecting an aggregate of capital leases and long-term financing obligations, plus senior notes. Carmike's quarter-ending balance sheet included cash of $133.9 million. Our top priority for cash deployment remains circuit growth,” concluded Mr. Hare.  Supplemental Financial Measures  Theatre level cash flow, EBITDA, adjusted EBITDA, adjusted net income, total debt and net debt are supplemental non-GAAP financial measures used by Carmike to evaluate its operating performance. Carmike defines theatre level cash flow as adjusted EBITDA, as defined below, plus general and administrative expenses. Carmike believes that theatre level cash flow is an important supplemental measure of operating performance for a motion picture exhibitor’s operations because it provides a measure of the core operations, rather than factoring in items such as general and administrative expenses and depreciation and amortization, among others. In addition, Carmike believes that theatre level cash flow, as defined, is a widely accepted measure of comparative operating performance in the motion picture exhibition industry. Adjusted net loss is defined as net loss plus impairment of long-lived assets, merger and acquisition-related expenses, lease termination charges, and (gain) loss on sale of property and equipment, net of tax. Carmike believes adjusted net income is an important supplemental measure of operating performance for a motion picture exhibitor because it provides a measure of core operations. Total debt is defined as the sum of current maturities of capital leases and long-term financing obligations, long-term debt and capital leases and long-term financing obligations (less current maturities). Net debt is defined as total debt less cash and cash equivalents. EBITDA is defined as net income plus income tax benefit, interest expense and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus loss from unconsolidated affiliates, loss from discontinued operations, merger and acquisition-related expenses, lease termination charges, (gain) loss on sale of property and equipment, and impairment of long-lived assets. Carmike believes that EBITDA and adjusted EBITDA are important supplemental measures of operating performance for a motion picture exhibitor’s operations because they provide measures of core operations.  About Carmike Cinemas (www.carmike.com)  Carmike Cinemas, Inc. is a U.S. leader in digital cinema, 3-D cinema deployments and one of the nation's largest motion picture exhibitors. The Company has 253 theatres with 2,670 screens in 37 states. The circuit includes 38 premium large format auditoriums featuring state-of-the-art technology and luxurious seating, including 23 "BigDs," 13 IMAX auditoriums and two MuviXL screens. As "America's Hometown Theatre Chain," Carmike's primary focus is mid-sized communities.  Disclosure Regarding Forward-Looking Statements  This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs, expectations and future performance, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words, “believes,” “expects,” “anticipates,” “plans,” “estimates,” “seeks” or similar expressions. Examples of forward-looking statements in this press release include the Company’s expectations regarding box office performance, food and beverage strategies, circuit expansion, second quarter performance, the upcoming film slate, additional acquisition opportunities and the Company’s ability to complete future transactions. Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on beliefs and assumptions of management, which in turn are based on currently available information. The forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Important factors that could cause actual results to differ materially from those contained in any forward-looking statement include, but are not limited to: the ability of National CineMedia to secure approvals and satisfy conditions necessary to complete the acquisition of Screenvision; our ability to achieve expected results from our strategic acquisitions, general economic conditions in our regional and national markets; our ability to comply with covenants contained in our senior secured credit agreement and the indenture governing our 7.375% Senior Secured Notes due 2019; our ability to operate at expected levels of cash flow; financial market conditions including, but not limited to, changes in interest rates and the availability and cost of capital; our ability to meet our contractual obligations, including all outstanding financing commitments; the availability of suitable motion pictures for exhibition in our markets; competition in our markets; competition with other forms of entertainment; and other factors, including the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013, under the caption “Risk Factors.” We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.                                                              CARMIKE CINEMAS, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)                                                                                                                        Three Months Ended                                                     March 31                                                     2014          2013                                                                         Revenues:                                          (Unaudited)     (Unaudited) Admissions                                         $ 97,572        $ 81,055 Concessions and other                               61,352        48,228                                                                       Total operating revenues                             158,924         129,283                                                                     Operating costs and expenses: Film exhibition costs                                52,889          43,016 Concession costs                                     7,119           5,929 Salaries and benefits                                21,534          18,359 Theatre occupancy costs                              20,361          15,214 Other theatre operating costs                        29,382          23,798 General and administrative expenses                  7,498           6,015 Lease termination charges                            —               3,063 Depreciation and amortization                        11,771          10,201 (Gain) loss on sale of property and                  (67     )       80 equipment Impairment of long-lived assets                     358           192                                                                          Total operating costs and expenses                  150,845       125,867                                                                      Operating income                                     8,079           3,416 Interest expense                                    13,116        12,298                                                                       Loss before income tax and income from               (5,037  )       (8,882  ) unconsolidated affiliates Income tax benefit                                   (2,010  )       (4,251  ) Loss from unconsolidated affiliates                 (85     )      (1,015  )                                                                     Loss from continuing operations                      (3,112  )       (5,646  ) Loss from discontinued operations                   (52     )      (137    )                                                                     Net loss                                           $ (3,164  )     $ (5,783  )                                                                     Weighted average shares outstanding: Basic                                                22,821          17,547 Diluted                                              22,821          17,547                                                                     Net income per common share (Basic and Diluted): Loss from continuing operations                    $ (0.14   )     $ (0.32   ) Loss from discontinued operations, net              —             (0.01   ) of tax                                                                     Net loss per common share                          $ (0.14   )     $ (0.33   )                                                      CARMIKE CINEMAS, INC. and SUBSIDIARIES SUPPLEMENTARY NON-GAAP RECONCILIATIONS                                                           THEATRE LEVEL CASH FLOW AND ADJUSTED EBITDA (Unaudited) ($ in thousands)                                                                                                                                                                              Three Months Ended                                                          March 31,                                                            2014        2013                                                                                                                                       (Unaudited)     (Unaudited) Net loss                                                 $  (3,164 )     $  (5,783 ) Income tax benefit                                          (2,010 )        (4,251 ) Interest expense                                            13,116          12,298 Depreciation and amortization                              11,771        10,201                                                                            EBITDA                                                      19,713          12,465 Loss from unconsolidated affiliates                         85              1,015 Loss from discontinued operations                           (52    )        (137   ) (Gain) loss on sale of property and                         (67    )        80 equipment Impairment of long-lived assets                             358             192 Lease termination charges                                   —               3,063 Merger and acquisition-related expenses                    614           531                                                                               Adjusted EBITDA                                          $  20,651      $  17,209                                                                            General and administrative expenses                        6,884         5,484                                                                             Theatre level cash flow                                  $  27,535      $  22,693                                                               TOTAL DEBT AND NET DEBT (Unaudited) ($ in thousands)                                                                                                                  Mar. 31, 2014     Dec. 31, 2013 Current maturities of capital leases and       $  7,231          $  6,870 long-term financing obligations Long-term debt                                    209,637           209,619 Capital leases and long-term financing           236,804         238,763   obligations, less current maturities                                                                   Total debt                                     $  453,672        $  455,252 Less cash and cash equivalents                   (133,910 )       (143,867 )                                                                   Net debt                                       $  319,762       $  311,385                                                          ADJUSTED NET INCOME (Unaudited) ($ in thousands)                                                                                                                      Three Months Ended                                                           March 31,                                                             2014        2013                                                                                                                                         (Unaudited)     (Unaudited) Net loss                                                  $  (3,164 )     $  (5,783 ) Impairment of long-lived assets                              358             192 (Gain) loss on sale of property and                          (67    )        80 equipment Lease termination charges                                    —               3,063 Merger and acquisition-related expenses                      614             531 Tax effect of adjustments to net loss                       (389   )       (1,662 )                                                                            Adjusted net loss^(1)                                     $  (2,648 )     $  (3,579 )                                                                            Weighted average shares outstanding (basic)                  22,821          17,547 Weighted average shares outstanding (diluted)                22,821          17,547 Adjusted net loss per share (basic and diluted)           $  (0.12  )     $  (0.20  )        Adjustments to net loss for the three months ended March 31, 2014 and (1)  2013 are shown net of tax effect of 43.0% which represents the estimated       combined federal and state tax rates for each period.  Contact:  JCIR Robert Rinderman or Jennifer Neuman 212-835-8500 ckec@jcir.com or Carmike Cinemas, Inc. Richard B. Hare, 706-576-3416 Chief Financial Officer  
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